Home values in uae continue to fall

The fall in property prices in Dubai is slowing analysts are not expecting any sudden improvement in the emirate’s real estate market. Sale prices fell 1.9% and rents were down 0.7% in January, according to figures from Deutsche Bank.

‘We still do not see any improvement in fundamentals that could trigger a recovery,’ said analysts Nabil Ahmed and Athmane Benzerroug in a note to clients.

‘The supply overhang still looms large, homebuyers still lack appetite, transaction volumes remain anemic, banks remain cautious lenders and international investors are still wary of the UAE property market,’ they added.

Some analysts believe that Dubai property prices, which have already dropped 60% since the peak of the market in 2008, are set to fall another 10% over the next two years as fresh supply floods the market. Neighbouring Abu Dhabi is also expected to see a deteriorating market.

There prices are down 45% and rents and sale prices for Abu Dhabi property will continue to fall across the board during 2011 due to heavy oversupply, according to Jones Lang Lasalle. The property consultancy said that although there have been limited transactions for residential sales, average prices per square foot have now dropped some 45% since their peak in the second quarter of 2008.

Source: Property Community